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Monday, 30 November 2009

Are Your Credit Scores Really Free?

First things first: What is a credit score? A credit score is a number that will be used to gauge your credit worthiness. These important numbers can be taken from your credit reports filed by the credit bureaus. This is vital information in your files as this will be the determinant if you are qualified for loans, what are your credit limits and your interest rates. This means that a good credit score means better deals from banks, credit companies and other financial institutions.

There are three major credit reporting bureaus where you can check your scores - Equifax Inc., Experian Group Ltd., and TransUnion LLC are the accredited bureaus. Per government mandate, you can have a credit report per 12 months for free from the website AnnualCreditReport.com - a site made by these three bureaus. For the credit score however, the site charges about $8 each.

These reports are presented with detailed account history. But for a first timer, the parade of numbers in the sheet may be confusing. And making matters worse are the different scoring models used. FICO, the widely-used model for instance has a latest version - the FICO 08.

So to simplify the matter, several credit monitoring companies have made their presence available through the web. And of their offered services is a glimpse of their credit scores for free! Some of the companies are Credit.com Inc., CreditKarma.com and Quizzle.com. These sites also offer calculating your own scores and tips on how to improve and settle your finances. Just last week, Credit.com launched a free Credit Report Card which shows how consumers will likely be rated using five models. For you to avail these offers, all you need is to sign up for free and answer several questions for identification purposes. Safety and confidentiality is also not a problem as these sites claim that they encrypt any data before such are stored in their files. Your Social Security number is also claimed to be protected as they delete it immediately after pulling out your credit report.